9. (Share value) At the end of last year a company had 12 million shares ($2.50

Question

9. (Share value) At the end of last year a company had 12 million shares ($2.50 par value) outstanding and total owners' equity of $96 million. Net income in the past year was $25 million, and 11.5 million shares 10. were outstanding on average during the year. a. What is the remaining obligation, if any, of a share- holder who purchased shares from the company at $1.00 per share? $10.00 per share? year-end year 2 b. What is the remaining obligation, if any, of a share- holder who purchased shares from the company at c. Calculate the company's book value per share at d. Calculate the company's earnings per share for the

Explanation / Answer

c. Book value per share = total owners equity/ shares outstanding at year end

= 96m/12m = Rs 8 per share

d. Earnings per share = Net income / shares outstanding on average during the year

= 25m/11.5m = $ 2.17

a. Remaning obligation = Book value - paid value = 8-1 = 7

b. Remaning obligation = 8 - 10 = 0 , amont paid is greater than book value.

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